4 Keys to Increasing Your Credit Score

Credit scores fall between 300 and 850, but do you know exactly what comprises that score?  Below are four key inputs to focus on if you’re working to boost your credit score this year.
#1 – Make on-time payments.
When working to boost your credit score, your first goal is to avoid making any late payments. On-time payments are heavily weighted when calculating your credit score. Because of this, it is essential to consistently make payments on time as you work to boost your credit score. If you’ve made late payments in the past, not to worry, the last year of your payment history holds the most weight.
#2 – Be aware of your credit utilization rate.
Your next priority is to be mindful of how much of your available credit is being used. Your credit utilization rate is the percentage of your total revolving credit balance being used. The recommended utilization rate is 30% or less. Being mindful of this rate is essential because the amount you owe makes up a large portion of your credit score.
#3 – Strategically find ways to pay off debt faster.
It is best to work to pay off any existing debt as soon as you’re able. Remember, a good portion of your credit score is based on balances owed. Balance transfers and refinancing are excellent tools when used to pay down debt quicker with lower interest rates.
#4 – Build your credit age and mix.
Your final goal is to grow your credit age. Credit age is calculated by taking the length of time your credit accounts have been open and dividing it by the total number of accounts. The older the age of your credit, the better. Adding revolving loans (like credit cards) and fixed loans (like vehicle loans) to your mix over time helps with credit age and shows payment history.
Remember, building credit is a marathon, not a sprint! Patience and consistency will pay off over time as you stay the course with payments, balances, and building your age and mix. Our personal financial associates are happy to discuss ways to improve your credit score. Members can also access their credit scores for free anytime in Online Banking and the Mobile App.